Taking Stock / Olmert the terminator
Will we remember him as the communications minister who buried the establishment of an independent Communications Authority, a move the market had been eagerly awaiting for 10 years? Or will he go down as the minister who cringed before the cellular carriers and reinstated much of their interconnect fees?
Will we remember him as the industry and trade minister who time and again ignored the advice of experts, a minister who tried to arrange subsidies for the mightiest of industrialists, contradicting professional opinions? Or as the one whom the biggest industrialists held in high esteem, dancing and flapping around him as he traveled the world?
Or maybe we'll remember him as a public relations genius, who morphed into a political dove, supported disengagement, overnight becoming the darling of the left-wing elites?
No. If there's one move that encapsulates in a nutshell his stint as mega-minister with tremendous, sweeping economic powers, it's his garroting of the Israel Consumer Council.
Perhaps it was time
Four months after Galit Avishai quit as council chairman, accusing the minister of supporting the companies at the expense of the consumers, she was joined by the council's legal counsel, Yossi Burg. He told much the same story: the council had been weakened. It had become a shattered, pathetic shadow of its former self as the interests of the parties it battles had been prioritized higher.
Is there an upside? Maybe the Israel Consumer Council as an arm of the Trade and Industry Ministry should be abolished altogether. Maybe its emasculated board, which Olmert seeded with Likud Central Committee activists, should be disbanded, and its employees moved to other ministry departments.
The thing is, making the Israel Consumer Council subject to a government body like the Industry Ministry was a mistake from the start. The ministry has always been the address for industrialists, the place they find grants and a sympathetic ear, a source of tax exemptions for the wealthiest of companies.
Trying to nurture a consumer protection division in that environment is a mistake. What's really needed is legislation to establish a completely independent consumer watchdog, with a public council, no affiliations to politics or big business, an authority led by a courageous, diligent super-regulator who can give the feeble, passive and ignorant Israeli consumer the tools to take on the monopolies, the duopolies and all the rest of the power-mongers who bleed him dry.
Super-regulator? Corporate Israel breaks out in a sweat at the very thought. Israel is over-regulated already, they'll wail - we should be learning from the Americans/Europeans/
Japanese/Scandinavians/British and let the market forces run free.
Nonsense. Claims like that derive from ignorance at best, and deliberate attempts to mislead the consumers at worst.
Israel's economy is starved for regulation. It begs for the involvement of unbiased antitrust and consumer protection officers who can lead reforms that will shatter the monopolies once and for all, and reduce the concentration of power throughout the marketplace.
If you still think regulation contravenes free market economics, you should read the writings of the founder of free market theory, the 18th-century thinker who coined the phrase "the hidden hand" - the Scotsman Adam Smith (1723-1790).
Smith is famous for advocating that markets should be left alone; people acting to maximize their personal gain will increase the economy's gain as a whole. But his book "The Wealth of Nations" contains a wealth of opinions that cast his stereotyped image in a very different light.
Smith wrote that the worker's employers are a third class, a strata of people living off profit. Their interests are not the same as those of the people, or the interests of the other two classes. Traders and industrialists usually use the most capital, and attract most of the public's attention by virtue of their wealth, Smith went on.
As they devote their days to plans and industry, they often boast deeper understanding than the landed aristocracy, Smith wrote, but their efforts are confined to the narrow interests of their business, not the interests of the general public. Their judgment regarding their narrow interest is more reliable than their judgment regarding the interest of the public, he concluded.
So, Smith counseled the generations to come, any legislative proposals or commercial regulation originating with that third class should be treated with suspicion. It should be checked inside and out, not only assiduously but warily, because it arises from a class whose interest is never identical with that of the public; indeed, the third class's interest is usually to defraud the public.
Thus wrote Smith, hundreds of years ago.
In other words, he reminds us that big business' interests lie in squeezing the public dry, so when economic decisions need making, their judgment is highly suspect. They have their own interests at heart, not the public's.
Each and every minister, Knesset member, civil servant, regulator and perhaps the press, too, should remember Adam Smith's counsel, every time big business tries to influence legislation or regulation. By all means, let us hear what they have to say, let us learn their opinions, but at the end of the day let us remember that sage, 250-year-old advice from the man who invented market economics.
Like us on Facebook and get articles directly in your news feed